A 60-day, 9% discounted note for $26,400 is received from a customer on account on May 1. What are the proceeds from the...

Question

Question

A 60-day, 9% discounted note for $26,400 is received from a customer on account on May 1. What are the proceeds from the note on May 1?

Select the correct answer.

$396

$26,400

$26,004

$26,796

business accounting

Answer 1

Answer #1

The correct answer is $26,004.

Supporting calculations:

Proceeds from the note = (Note value - Discount on note)

= ($26,400 - [$26,400*9/100*60 days/360 days]

= $26,400 - $396

= $26,004

Therefore, the proceeds from the note on May is $26,004.

Answer 2

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